Across the United States, a lack of housing inventory has created a huge seller’s market — that is, prices are on the rise and buyers may face bidding wars. As a buyer, this creates a situation where you might be in fierce competition for a home and potentially bidding for a home with concessions. That means it’s prudent to be aware of some factors that could lower a property’s value as you are trying to score that dream home. Here are some of the five factors that can hurt property value that should be on your radar.
Even if it’s not broken, you still might need to fix it
Seemingly small home maintenance projects can equal big home repairs down the line. Some of these issues can lower property value more than others. You may want to consider the U.S. Department of Housing and Urban Development’s (HUD) comprehensive maintenance checklist to see if the home you have in mind is lacking in any of these areas such as: A damaged or old HVAC system, signs of termites, decaying foundation, frayed electrical wires, cracked driveways and pathways, or leaky plumbing.
Kitchens and bathrooms from another era
Did you find the home of your dreams but the kitchen and bathrooms leave a lot to be desired? Updating these all important areas of a home by replacing appliances, pastel tiling (hello 1960s), and outdated countertops, can bring a home back into the current decade. A minor kitchen remodel adds on average $18,206 in value to a home (77.6% ROI), while a major kitchen remodel adds $40,216 (58.6% ROI). Remodeled bathrooms significantly increase home value as well, adding between $13,688 to $49,961 on average, depending on the quality of finish.
The roof is on fire
Roof problems are big problems for a home — missing shingles, decaying siding, and moss are all signs that it could need a revamp. Installing a new roof increases home value by almost $12,000, bringing a fairly high return on investment compared to other home renovations. Especially in the winter, when the roof is in high-gear keeping your home dry, a damaged one can seriously decrease property value.
Upgrades can add value to a home, but only if they are done correctly. In fact, lackadaisical upgrades could decrease rather than add to your home’s merit. Some of those might include:
Crooked tiling in the bathroom, warped flooring, uneven decking and railings, or gaps between flooring and walls — these all might equal buyer beware.
It’s better to have zero landscaping than a home with neglected greenery, with landscaping that goes from “good” to “poor” diminishing property value 5% to 15%. Luckily, this is one of the straightforward tips for improving property value. A super high-maintenance lawn can be replaced with native plants, gravel, stones, and drip irrigation, all changes which can help your yard stay strong in any season.
If you are looking to buy a home, being aware of factors that can reduce its value can help you stay aware of upgrades that you might have to foot the bill for, or ones that you definitely want to avoid if possible.